Major asset managers short U.S. Treasuries, say Fed rate cuts this year may be overestimated

Invesco, Carmignac and BNP Paribas portfolio managers are shorting U.S. Treasuries, arguing that market expectations for at least two Fed rate cuts this year are overpriced. Recent safe-haven buying and softer January inflation pushed Treasury prices up and yields down toward multi-month lows, reflecting widespread bets that easing price pressures and potential labor-market weakness will let the Fed deliver sizeable cuts later in the year. The asset managers disagree: they point to stronger-than-expected January job growth, large corporate investment in AI, and Federal Reserve minutes showing policymakers’ caution toward cutting rates — including officials noting possible rate hikes if inflation stays above 2%. Invesco’s fixed-income chief Rob Waldner views one cut this year as the base case but acknowledges rising odds of no cuts given resilient data. TS Lombard similarly advises clients to push expected rate cuts into the second half of 2026. Managing over $2.2 trillion in assets, Invesco has reduced its U.S. Treasury holdings on expectations of firmer economic growth and inflation remaining above target. The article frames these moves as contrarian bets against the prevailing market view and notes this is informational, not investment advice.